The EU Companies May Be Affected by the New US Sanctions

Tony Van der Togt, MA in History, is a Senior Research Fellow at the Clingendael Institute, the Netherlands.

Resume:
Is friendship possible when it comes to international relations and bilateral ties? Should a state consider interests of its counterpart when making big decisions? Even though the US and the EU are seen as an inseparable duo, at times their approaches to international challenges differ.

Is friendship possible when it comes to international relations and bilateral ties? Should a state consider interests of its counterpart when making big decisions? Even though the US and the EU are seen as an inseparable duo, at times their approaches to international challenges differ.

Tony van der Togt, Senior Research Fellow at Netherlands Institute of International Relations shares his thoughts on relations between the European Union and the United States regarding sanctions as well as the split on Russia.

We have now all seen the new Kremlin document, issued by the US Government. Do you think it is going to somehow affect EU-Russia economic relations?

In practice nothing really new is happening. What matters for the Europeans, is coordination and the lack of it. Under the Obama Administration, the sanctions were very much coordinated, which also means that certain sectors of special interest to New York, like the gas sector, were mostly left out from the sanctions package. Even though the European and American sanctions were not identical, they were implemented in the same direction, with a lot of overlaps.

Europeans are concerned that the Americans will develop new sanctions which are not coordinated and could target the sectors that do not correspond with EU’s interests. Americans believe that their legislation is also applicable outside the US territory, and Europeans do not share this idea. For example, if Royal Dutch Shell company wants to participate in the project, which is not under the EU sanctions and is completely allowed by EU, but some Russian partners are under EU sanctions, then Shell would get in trouble with the Americans for undercutting the US sanctions.

As Europeans, we do not accept this extra territorial broadening of the US sanctions. But there is no difference for companies, since they get fines in the US, under the US legislation. Here arises the big question whether American sanctions would also target North Stream and what the consequences for European companies would be. As of now, the US officials came up with a list of the Russian elite and oligarchs, which just has been taken from Forbes, I think. Now we are waiting for the US to uncover the grounds for imposing the sanctions. European sanctions were very targeted, affecting people who are supposed to be somehow involved in Donbass, Crimea, or are profiting from the situation there. I think that Europeans, especially European companies, are afraid of the sanctions regime growing hard and affecting them. We only have to wait and see how the list is going to be used.

Andrey Kortunov, RIAC Director General, published an article on Russia–US relations, suggesting that we not be wait on our leaders to make a first step to resolve the current crisis. In his opinion, the movement should be initiated from from the bottom up. Do you think the same mechanism would be applicable to the Russia–EU relations?

It is difficult. In Europe you have this kind of divisions between member states, and their views on Russia. If you look at population at large, the joint strategy could work, but there is no common line in Europe about Russia, there is big division. In the US it may be different. You have people who are real Cold warriors, exaggerate everything — all bad things come from Russia. Others are a little bit more moderate. In Europe it depends on the country: from Baltic states and Poland to Austria, Germany, and France. Things are shifting and one dangerous element is that everyone, including Europe, is talking about the hybrid conflict. Nobody knows exactly what hybrid conflict is, but everyone is talking about it. In Europe it is not as exacerbated as it is in the US. Because, for Americans even bad weather means that “it should be the Russians”. In the Netherlands we are also talking about the safety of electoral systems. What is Russia doing with extremely right-parties? Is Russia stimulating separatism? This ‘elections trend’ has a negative impact on general discussions about Russia. We have to tackle that before we get a common stance.

Is it a country-to-country approach then?

I think so. For example Germany, which is the most important country for Russia in Europe, has a challenge to face. What is new German policy on Russia going to be? Is that policy going be unifying? Even that is questionable. Germany is the most important partner for Russia in Europe. We definitely need a common stance, and we are trying to find it. But do not expect the results in short term.